Work has begun on converting a cluster of Yuen Long village houses into a columbarium, in what is the latest of a wave of private ash repositories springing up in sensitive or historic sites.

One of the four houses, which the Antiquities and Monuments Office has proposed for listing as a grade three historic site, has had all its distinctive architectural features bricked over, while lands and town planning officials try to work out whether such use is allowed on the San Wai Tsuen site.

The developers have already run into trouble with the Buildings Department, which has given them two months to demolish an unauthorised entrance hall erected next to the remodelled house at 60 San Wai Tsuen.

Neighbouring villagers who are refusing to sell their houses to the developers are also upset about the work and plan to protest against it tomorrow.

'The houses should be preserved as a heritage area instead of used as urn sites,' said Tse Man-fu, who grew up in the village and is planning the protest.

Tse said his great-grandfather built the house at No 61 in the 1930s and his mother was still living there. He is preparing to take legal action against the company over ownership of the house.

The developments follow an announcement in April by Aptus Holdings, a company listed on the Growth Enterprise Market, detailing a plan to convert several sites, including four historic houses in San Wai Tsuen, to provide 69,000 'boxes', or niches.

The antiquities office noted preparation for construction at the No 60 site in a 2004 assessment record, saying: 'Hopefully the appearance of the house will not be changed, as it is a rare mixed-style house with built heritage value.'A visit to the site on Wednesday revealed that the verandahs, the pitched roof and window frames - all characteristic of the Qing vernacular style - from the 1930s were covered by new brick walls. An excavator was levelling the field in front of the house. Aptus chairman Lam Wai-pong said the company was not aware No 60 was on the heritage list.

'We did not receive any information from officials on this,' Lam said. 'We will not undo the sealing of the windows, because we have to make sure we can control the lighting.'

About 200 funeral urn niches have already been sold.

Work is expected to be completed this year, and the company will continue to buy up land in the area. It started after the company acquired the assets of Casdon Management in May for HK$1.085 billion.

The renovation will cost HK$45 million.

While the grading of No 60 is yet to be confirmed, the rest of the four houses the company acquired were designated grade two or three status in May, with their group value with seven other houses in the village recognised.

The company would do similar conversion work to the three other graded buildings it owned, he said, unless the government had other recommendations.

Lam also said his company, backed by senior counsel familiar with land law, was ready to argue for the legality of the columbarium. The lawyers said the sites' village-type development zoning permitted ancestral halls or a shrine. The company was seeking professional advice about the demolition order for the entrance hall.

It was trying to gain the villagers' support by offering half-price or free niches to them.

Henry Lo Ka-yu, a researcher in architectural conservation at Chinese University, said he was concerned heritage buildings would lose authenticity because of unguided renovation work.

Lo said the houses had some architectural merit, including one house that had floor tiles similar to those in Wan Chai's 1920s Blue House. The village's establishment was reminiscent of that of Kaiping, a town with fortified multiple-storey buildings and a Unesco world heritage site, he added.

Democratic Party legislator Lee Wing-tat said it would be too slow if the government continued to adopt a case-by-case approach on heritage and nature conservation.

It was time officials reviewed their policy and identified priority sites for conservation funded by public and private contributions, he said.

Niche development

A Yuen Long village site joins the list of private columbariums in dispute

Taishan residents from Guangdong set up San Wai Tsuen in the early 20th century

11 grey-brick houses remain that are either proposed or confirmed as grade two or three historic buildings

Antiquities and Monuments Office says the cluster of buildings have historic value as a whole

Aptus Holdings bought four houses to build 69,000-niche columbarium. Work has begun at No 60

Status of house at No 60

Proposed grade three site

Wong Tsun-tsoi built house in the 1930s, but seldom lived in because of bad fung shui

Qing vernacular architectural style has strong Western influence

Buildings Department issued demolition order on entrance hall added next to the house